Games for electricity traders: Understanding risk in a deregulated industry

We illustrate and discuss the use of a computer-based learning environment, known as a microworld, for training agents in the Colombian electricity market. As the market operator was concerned with efficiency in the electricity spot market because of an insufficient number of participants, they commissioned a tool that could help potential participants to learn about both market operation as well as the risk management it involved. By making the industry more transparent it was intended that a larger number of traders and companies would participate in the market, making it more efficient. We describe the development and use of this tool, which is based on system dynamics and gaming. (C) 2008 Elsevier Ltd. All rights reserved.